USA: +1(669)289-8683 
Sign in
E8-6: Nova Co.
On December 31, 2011, when its Allowance for Doubtful Accounts had a debit balance of $1,400, Nova Co. estimates that 9% of its accounts receivable balance of
$90,000
will become uncollectible and records the necessary adjustment to the Allowance for Doubtful Accounts. On May 11, 2012, Nova Co. determined that J. Rast’s account was uncollectible and wrote off $1,200. On June 12, 2012, Rast paid the amount previously written off.
Prepare entry for estimated uncollectibles, write-off, and recovery.
Instruction:
Prepare the journal entries on December 31, 2011, May 11, 2012, and June 12, 2012.
P8-1A: Sellmore
Sellmore.com
uses the allowance method of accounting for bad debts. The company produced the following aging of the accounts receivable at year-end.
Journalize transactions related to bad debts.
|
Total |
Number of Days Outstanding |
||||
|
0–30 |
31–60 |
61–90 |
91–120 |
Over 120 |
|
|
Accounts receivable |
$377,000 |
$222,000 |
$38,000 |
$15,000 |
$12,000 |
|
% uncollectible |
10% |
||||
|
Estimated bad debts |
Instructions
a) Calculate the total estimated bad debts based on the above information.
(a) Tot. est. bad debts $10,120
b) Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in (a). Assume the unadjusted balance in Allowance for Doubtful Accounts is a $4,000 debit.
(c) Of the above accounts, $5,000 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account.
E9-3: Enrique Company
On March 1, 2012, Enrique Company acquired real estate, on which it planned to construct a small office building, by paying $80,000 in cash. An old warehouse on the property was demolished at a cost of $8,200; the salvaged materials were sold for $1,700. Additional expenditures before construction began included $1,900 attorney’s fee for work concerning the land purchase, $5,200 real estate broker’s fee, $9,100 architect’s fee, and $14,000 to put in driveways and a parking lot.
Determine acquisition costs of land.
(a) Determine the amount to be reported as the cost of the land.
(b) For each cost not used in part (a), indicate the account to be debited.
E9-13: Jendusa Corporation
These are selected 2012 transactions for Jendusa Corporation:
Prepare adjusting entries for amortization.
|
Jan. |
Purchased a copyright for $120,000. The copyright has a useful life of 6 years and a remaining legal life of 30 years. |
|
Mar. |
Purchased a patent with an estimated useful life of 4 years and a legal life of 20 years for $54,000. |
|
Sept. |
Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite. |
Instructions
Prepare all adjusting entries at December 31 to record amortization required by the events.
